According to the financial asset arbitrage equation, a rise in the capital gain for a stock implies a rise in the real interest rate, all else equal.

Question

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The financial asset arbitrage equation states that the expected return on a stock is equal to the real interest rate plus the expected capital gain. Therefore, a rise in the capital gain for a stock implies a rise in the real interest rate, all else equal.

According to the Financial Asset Arbitrage Equation, a Rise in the Capital